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Trading the Noise - Blue Line Morning Express

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Morning Express

As you know, our whole report goes out each morning to clients and Free Trial subscribers berfore 7:00 am CT. Enjoy our Fundamnetals below. But please register for a Free Trial of 1 or all 5 of of our Blue Line Express daily commodity reports in order to get all of our great insight; Techinicals, Fundamenals, and proprietary Bias and Levels. E-mini S&P, Crude, Gold, Natural Gas and the 10-year.

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E-mini S&P (March)

Yesterdays close:Settled at 2594, up 11.50

Fundamentals:U.S benchmarks are holding firm near the top-end of their recent range with the S&P facing the psychological 2600 hurdle and whats just above. Yesterday, Fed Chair Powell continued to paint a patient and flexible rhetoric on hiking interest rates again, however, he pointed to momentum in growth carrying from last year. He is not wrong, growth only dipped in December. Threes a trend, the next 30 to 60 days will be picked apart. Doubling down, he said he sees the Feds balance sheet substantially smaller. Equity markets initially did not like that comment but were able to battle back before close. The Feds path of tightening faces a key test today with U.S CPI being released at 7:30 am CT. We watch the Core read most closely and this has not signaled one bit that inflation is running away. In fact, on a YoY basis, it has come in shy of expectations for three of the last four months and has only beaten twice in the last year. The MoM read has not seen hot +0.3% growth since last January. Expectations for todays results come in at 2.2% YoY and +0.2% MoM.

Headline risks persist with everything from U.S and China trade to Brexit and the government shutdown facing its fourth week. The S&P has gained for four straight sessions but has not broken out. We maintain our viewpoint that this run is tiring and is within 1% of its exhaustion point in the near-term.

Technicals:The S&P settled within our key resistance pocket of 2592-2596.75 yesterday after trading to a high of 2599.50; the psychological 2600 barrier remains elusive but more importantly we have major three-star resistance overhead at 2603-2609.50. Depending on your conviction level, you do not want to tip-toe around and wait for a direct test to major three-star resistance without having any short exposure on or not getting out of longs. First key support comes in this morning at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Crude Oil (February)

Yesterdays close:Settled at 52.59, up 0.23

Fundamentals:WTI traded to an overnight high of 53.31 as it attempts to post gains for the ninth straight session. Our narrative has not changed; we need a fresh catalyst to hold $50. Such can easily come one of three ways. Most importantly, domestic stockpiles must shrink. Crude has battled in the face of bloating storage of its own and within the products. Furthermore, Cushing has added for 15 out of the last 16 weeks. Additional jawboning from OPEC or Saudi Arabia could feed the recoverys appetite. Saudi Arabia announced this week they would slash exports, and this should trickle into U.S inventory data and they doubled down saying fresh action from OPEC might be necessary. Lastly, a flat-out trade deal between the U.S and China would bring a massive tailwind to risk-sentiment. Baker Hughes rig count data is due at noon CT.

Technicals:Please note, our Bias has shifted below. First key resistance at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Gold (February)

Yesterdays close:Settled at 1287.4, down 4.6

Fundamentals:Gold traded to a high of 1295.7 and CPI data was right in-line with expectations. This should leave the technicals in control with another lower high for the metal on the chart. We have pounded the table that we prefer to capitalize on strength and even such there has been multiple swings this week to buy first key support and sell against strong resistance. The Dollar is unchanged and todays close will also bring technical importance. While the Dollar is unchanged, it does not include the Chinese Yuan which has gained 1.5% on the week against the Dollar and is trading at its strongest level since July 26th. This has provided a tailwind to Gold to start the year and furthermore, China added to its Gold reserves in December for the first time since October 2016. Lastly, traders should keep a pulse on risk-sentiment, its ok if the Dollar Index holds ground if equity markets show weakness or Treasuries recover from a recent move lower; this would bring support to Gold.

Technicals:Price action is back below our momentum indicator which comes in at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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About the author

Bill Baruch is President and founder of Blue Line Futures a leading futures and commodities brokerage firm located at the Chicago Board of Trade. Blue Line’s mission is to put the customer first and bring YOU the best customer service, consistent and reliable research and state of the art technology. Bill has more than a decade of trading experience. Working with clients he focuses on developing trading strategies that present a clear objective for both long and short-term trading approaches. He believes that in order to properly execute a trading strategy, there must be a well-balanced approach to risk and reward.

Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER which followed running a trade desk at Lind Waldock and MF Global.

Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications.

Contributing author since 10/6/17 

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